Will the RCEP Kill the TPP and Why You Never Heard of Either One

by Stuart Jeanne Bramhall / December 8th, 2012

Unless you subscribe to Public Citizen or the Kucinich Report (from retiring Congressman Dennis Kucinich), you won’t have heard of the secret trade negotiations related to the Transpacific Partnership (TTP), aka the Transpacific Partnership Agreement (TPPA). The TPP is a “free” trade agreement like NAFTA or GATT (the treaty which created the WTO) but much worse. A major goal of US multinational corporations for the TPP is to impose on trading partners a set of extreme foreign investor privileges and rights and their private enforcement through the notorious “investor-state” system. This system allows foreign corporations to challenge, at international tribunals, health, consumer safety, environmental, and other laws and regulations that potentially affect the profitability of both domestic and foreign companies. If a corporation “wins”, the taxpayers of the “losing” country must foot the bill. (See Investment rules harm public health). Thus TPP will virtually obliterate the right of member countries to protect labor rights, enforce environmental and food safety standards and otherwise protect their citizens from amoral and rapacious corporate profit-seeking.

RCEP stands for the Regional Comprehensive Economic Partnership. This is a newly proposed free trade treaty coming out of the Association of Southeast Asian Nations (ASEAN) at their recent summit in Phnom Penh (Cambodia). Negotiations on RCEP are expected to start in earnest in 2013 (see ASEAN leaders begin RCEP negotiations). Outside of the Asian and Australian press, the RCEP has been virtually invisible in the corporate media.

The New (Old?) Trade War with China

The most important difference between the two free trade treaties is that TPP excludes China, Japan and Korea. RCEP would include all fifteen Asia countries comprising ASEAN, plus China, India, Japan, South Korea, Australia and New Zealand and exclude the US (See post-US world born in Phnom Penh). In other words, half the world’s population.

Both Korea and Japan have been invited to join TPP but are waffling, owing to harsh TPP provisions that potentially undermine their sovereignty and their economies.

Obama has deliberately excluded China, the world’s second largest economy, from TPP. Why? Because the US is engaged in a trade war with China and doing everything possible to isolate China economically and militarily (see Trade war in the Pacific).

With many Asian countries, especially Korea, Japan and Thailand, showing a clear preference for the less restrictive RCEP, the President’s end run around China, Congress and the American public may have backfired.

The TTP Treaty is Classified

The main reason you haven’t heard of the TPP is that the text of the secret trade treaty is “classified.” Even though 600 corporations are allowed online access to the entire text, access is denied to the public and members of Congress. Moreover the draft treaty contains specific provisions prohibiting its release to citizens of member countries until three years after ratification. Fortunately enough of the text has been leaked for numerous Republican and Democratic members of the House and Senate (which must approve all treaties) to be extremely hacked off about being excluded from the process. While NAFTA and GATT were being negotiated, former President Clinton kept Congress fully in the loop and even allowed them limited input.

Enter Wikileaks

Kiwi antiglobalization activists were out in force this past week for the latest round of TPP negotiations in Auckland. We wouldn’t know about TPP in New Zealand, either, if Nicky Haggar, one of our foremost investigative journalists, hadn’t visited Julian Assange in London in December 2010 (see Wikileaks cloak and dagger) just before he surrendered to the London police. As people will recall, Assange released hundreds of thousands of diplomatic cables just before he was taken into custody. He gave Haggar a preview of the US-New Zealand cables, which is how we learned of the conditions US corporations sought to impose on New Zealand as part of the TPP.

According to prominent antiglobalization attorney and activist Jane Kelsey, “The cables confirmed that US firms have our GM (genetic modification) regulations, restrictions on foreign ownership of land and mineral resources, and intellectual property laws, including Pharmac, squarely in their sights.” (see Wikileaks exposes government duplicity). Pharmac is the semi-autonomous government agency that negotiates bulk discounts with pharmaceutical companies for drugs used in New Zealand’s National Health Service.

The American public also has really strong reasons to oppose the TPP. According to Public Citizen, the new treaty is likely to move a million more US jobs overseas, further reduce government oversight of banks, ban Buy American policies designed to promote the greening of the US economy, flood the US with unsafe food and products, empower corporations to attack US health and safety standards and reduce or eliminate Americans’ access to cheap generic drugs. The Electronic Frontier Foundation believes TPP copyright provisions will lead to wholesale Internet censorship. Another big concern for antiglobalization activists worldwide is that specific TPP provisions would allow corporations to directly sue governments. Presently, under NAFTA, the WTO and bilateral free trade agreements, only governments can file suit against countries that supposedly interfere with the ability of their corporations to conduct business.

Who Hasn’t Joined TPP Negotiations?

In November 2011, Kelsey was the first to alert activists to Obama’s real objective in promoting the Transpacific Partnership (TPP): namely, the economic isolation of China. Originally limited to eight pacific rim nations and the US, the countries currently participating in TPP negotiations include Australia, Darussalam, Cambodia, Indonesia, Laos, Burma, Philippines, Singapore, New Zealand, Peru, Vietnam, Canada and Mexico Darussalam.

Both Japan and Korea have been invited to join TPP but have declined. In general, Japan prefers signing free trade agreements with non-agricultural exporting countries, rather than trying to compete with agricultural powerhouses like Australia, New Zealand and the US. (See Why Japan is lagging on the TPP)

Korea, which already has or is negotiating free trade agreements with all potential TPP participants, has no incentive to join and worries that with TPP membership would cost them concessions they have already won from these countries (see South Korea’s regionalism)

Thailand has been reluctant to join out of concern the US would use the TPP to protect big American pharmaceutical companies and block availability of low-cost medicines, a major pillar of the Thai health care system. (See Why Thailand reluctant to join TPP/)

Obama’s China Bashing

The Obama administration has deliberately excluded China, Asia’s largest (and the world’s second largest) economy, from TPP negotiations. As Kelsey notes in her article, The TPP as A Lynchpin of US Anti-China Strategy, Obama’s real agenda was obvious from Hillary Clinton’s speech to the November 2011 Asia Pacific Economic Cooperation (APEC) Leaders’ Summit in Honolulu. In it, she talks about “managing the relationship with China, economically and militarily” and employing TPP “as the economic limb of “American statecraft” to “lock in a substantially increased investment – economic, strategic and otherwise in the Asia Pacific region.”

As Kelsey points out, Obama underscored his efforts to remilitarize the Asia Pacific (and isolate China militarily) during a visit to Australia later that month. He chose this occasion to announce the US troop build-up in Australia, Singapore and the Philippines. Kelsey goes on to give numerous examples of overt China-bashing by US officials and corporate heads during the 2011 APEC summit. None of this was lost on Chinese representatives.

Why ASEAN Nations Prefer China as a Trading Partner

In Post-US World Born at Phnom Penh, David P Goldman (author of Why Civilizations Die and Why Islam is Dying Too), outlines why potential TPP members are flocking to sign up for the ASEAN (Association of Southeast Asian Nations)-initiated RCEP instead. First and foremost is declining US influence in Asia, in contrast to China’s rising importance. In 2002 China imported five times as much from Asia as from the US. Ten years later the value of Chinese imports from Asia is ten times the value of their US imports. Meanwhile Chinese exports to Asia have jumped 50% since 2007. Exports to the “moribund” US economy are virtually stagnant.

Why? As Goldman elaborates, with the decline of American manufacturing (US orders for manufactured goods are 38% below their 1999 peak), the US has stopped investing in the sort of high-tech, high-value-added industries providing the type of manufacturing Asia requires to build their industrial capacity.

It’s also of note that RCEP negotiators are putting special emphasis on “the spirit of openness” (potential partners aren’t obliged to keep the RECP negotiations secret from their citizens) and doesn’t limit the number of participants. Moreover the overall vision for RCEP (“trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement and other issues”) is less narrow and corporate-friendly. It’s also more committed than the pro-corporate TPP to honoring the UN’s Millennium Development Goals to end poverty in third world countries.

Will China Kill the TPP?

You can always hope. Given all the advantages of the RCEP for most Asian nations – and for Australia and New Zealand – it’s no surprise that the corporate media is keeping mum about ASEAN’s new and improved alternative to TPP. Australia and New Zealand, whose economies both depend heavily on the exports China buys from them, will definitely be at the table when RCEP negotiations start next year. Whether they continue to participate in US-led TPP negotiations remains to be seen. Despite the outcome of last week’s TPP talks in Auckland (which is classified, of course), I strongly suspect Obama’s secret negotiations to use TPP to undo fifty years of hard won labor, environmental and health and safety protections may be dead in the water.